Institutional investors back carbon tax scheme

Institutional investors have expressed broad support for the government's proposed carbon mitigation scheme. Under legislation outlined by Prime Minister Julia Gillard, the scheme will start from 1 July 2012. For the first three years, it will run as a tax on carbon of AU$23/tonne which expected to rise by 2.5% per year in real terms until 2015. It has a lower bound for inclusions of emissions equivalent to 25,000 tonnes of CO2, and only around 500 businesses are expected to be subject to the tax. From 2015, the scheme will convert to an emissions trading scheme, allowing the carbon price to then be set by the market and permits to be traded.